Short term capital gains on house property

1875 views 6 replies

Hi,

I have realised a short term capital gains tax on sale of house property. Following is the background of the case:

  1. Property was owned jointly by me and my brother. 
  2. Home Loan taken on the property was also in the joint names
  3. Payment of loan (EMI) was done by both of us (50% each)
  4. Both of us have claimed deductions for Interest on Housing loan from the salary income (50% each)

Following are my queries regarding tax payable on the profits realised on the sale of property:

  1. Do both of us have to pay the tax on profits (50% each) or only by the first name available in the sale agreement
  2. Property was sold in the month of May 2011 so by when the tax have to be paid

Request anyone of you to guide me on the queries. Thanking you in advance

 

Regards

Kartik Parekh

Replies (6)
  1. Do both of us have to pay the tax on profits (50% each) or only by the first name available in the sale agreement

Yes both of you are required to pay the tax to be calculated in the ratio of share in ownership(50:50)....But dont be bothered for this...the total amount of capital gain would be the same as it wud be if the property wud owned by one person....ratehr u will get the benefit ...in a way

 

supoose capital gain is 10,00,000, Since it is a short term captal gain it wud be taxed normally .u both will get benefit of minimum exemption slab . so ur total tax liabilty wud be lower as compared to the senerio were it wud be owned by one.

  1. Property was sold in the month of May 2011 so by when the tax have to be paid

regading payment i wud suggest u to pay the advance tax for year 2011-12..i think for individual the first installment is due on 15 oct(pls confirm this).

 

for any other query write me at cakarangogia @ yahoo.com

yes both have to pay tax.if u shares r definite then based on your shares.if not 50:50.

It is obvious when u both enjoyed the tax benefit on repayment of loan, then both have to bear the capital gain equally as well. However, u both will enjoy the slab rates applicable to the individual assessee.

when both have equal rights in property, how the sale deed can carry ONE name? look into the sale instrument it should be there ..........as Mr.............................& Others 

hi, Thank you all for guiding me for my queries.....

yeh you both share capital gain in ratio of ownership and you also require to advance tax of your before 15th December

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